Bangalore’s critical mass shows future power

While the US economy is crawling back on its recovery path and there is no end in sight to Europe’s economic mess, the fact remains that it is the governments there that seem to be poor — not the private sector giants, many of whom are cash rich. N Madhavan writes.

While the US economy is crawling back on its recovery path and there is no end in sight to Europe’s economic mess, the fact remains that it is the governments there that seem to be poor — not the private sector giants, many of whom are cash rich. I got reminded of what might have caused them to stay comfortable amid the Western crisis, when I drove through Bangalore at the weekend.

Driving through the Outer Ring Road, a long stretch, one can see for miles a unique mix of technology parks, home decor showrooms and north Indian restaurants that serve food to the tens of thousands of northies who have made Bangalore their home. The “ecosystem” spawned by the IT boom — including caterers, real estate services, transport agencies, packers and movers and lifestyle pubs — tell you the story of a growth that has not been overnight but steadily built over a decade or more.

And to me, it seems that some of the West’s problems can be linked to the way manufacturing jobs went to China and services jobs to India, making Western companies richer through lower cost operations or innovation research, even as domestic economies ebbed. You can see some of the evidence for this in Bangalore where everything from humble clerical work to advanced research and development in materials is taking place, not just for giants such as IBM but also hundreds of startups and scores of manufacturing companies that have captive centres in the city.

Dr Wido Menhardt, the head of Philips Innovation Campus, proudly said on Friday that 30% of those who were with the company’s R&D unit in Bangalore a decade ago were still around — and he added that in the city where talent poaching is notorious, that statistic is a symbol of achievement. The statistic is reflective of Bangalore’s frenetic growth.

From a technology perspective, the key point to note that Bangalore has achieved critical mass as a global R& D centre. What does this mean? It means that the next wave of technologies in emerging areas such as nanotechnology, solar energy or other cutting-edge disciplines could also be partially developed in the city. This is the quiet undercurrent I spot amid a slump in the West.